Profit over principle: Insurers renege on promises to offer child-only policies mandated by health care law

Copyright 2010 Houston Chronicle

Published
5:30 am CDT, Wednesday, September 29, 2010

Sept. 23 was a good day for average Americans: It marked the implementation of the first substantial rulings under the new health care provisions designed to help people find adequate, affordable health insurance.

Among the first provisions, some of which take effect immediately, some over the next six months: Insurers cannot drop people when they get sick, cannot place lifetime caps on coverage and must provide affordable insurance for people uninsured due to pre-existing conditions. Other benefits include free preventive care and partial closing of the "donut hole" on costs of prescription drugs for Medicare recipients.

But it wasn't a good day for thousands of children: One of the new provisions prohibits discrimination against children with pre-existing conditions. Several major insurance companies, after pledging to honor that provision, instead have chosen, just days before the deadline, to no longer offer child-only policies. (All insurance companies must accept children covered by the more expensive family plans, regardless of their medical history.)

This is a low blow: While child-only policies are estimated to account for less than 10 percent of single-coverage individual plans, tens of thousands of Texas children will be affected, since several major Texas insurers, including United Healthcare, Cigna and Aetna, will stop offering such policies.

As reported by the Chronicle's Todd Ackerman, almost 300,000 Texans under 19 are covered by individually purchased family or child-only policies, which have become more popular recently as employers have scaled back coverage. Medicaid and the Children's Health Insurance Program already offer coverage to poor children with pre-existing conditions.

Insurers complain that the new provisions would trigger an influx of consumers with high-cost pre-existing conditions but few healthy ones to offset these costs. That is certainly a possibility, but one that could have been foreseen and guarded against.

As recently as last March, Karen Ignagni, President and CEO of America's Health Insurance Plans, wrote U.S. Health and Human Services Secretary Kathleen Sebelius that the nation's health plans "recognize the significant hardship" of being unable to find coverage for a child with a pre-existing condition, that in 2008 they proposed reforms to abolish such exclusions, that they welcomed the change and would comply with it fully.

The Obama administration also recognized insurers' concerns. In July, it advised insurers it would favor open enrollment periods for child-only policies covering pre-existing conditions, a sensible solution to potential problems. Insurers seemed receptive, but as the deadline neared, several reneged on their pledge of support and washed their hands of child-only coverage.

If we ever needed a reminder that health care reform is long overdue, this one fits the bill. Bring on 2014, when even children with pre-existing health problems cannot be denied coverage.